Can You Use Two Insurances? How It Works

Having multiple insurance policies is possible and can offer broader protection. When multiple policies are in place, a specific process determines how they interact to prevent overpayment on a claim. This ensures total reimbursement does not exceed the actual loss.

Understanding Coordination of Benefits

Coordination of Benefits (COB) is the process by which insurance companies determine which plan pays first when an individual has more than one health insurance plan. This ensures total payments from all plans do not exceed 100% of allowable expenses. The primary plan pays its benefits first, then the secondary plan considers the remaining balance. Federal and state laws, along with contractual agreements, govern COB.

The determination of which plan is primary and secondary follows established rules. If an individual is covered by their own employer’s plan and also as a dependent on a spouse’s plan, their own plan is usually primary. The plan covering the patient as a policyholder typically pays before a plan covering the patient as a dependent.

A common rule for dependent children with two insured parents is the “birthday rule.” Under this rule, the health plan of the parent whose birthday falls earlier in the calendar year is designated as the primary plan. For example, if one parent’s birthday is in April and the other’s is in September, the April birthday parent’s plan would be primary.

Special rules apply when Medicare is involved, as it often acts as a secondary payer. If an individual has Medicare and group health coverage through current employment, the employer’s plan is generally primary if the employer has 20 or more employees. If the employer has fewer than 20 employees, Medicare usually serves as the primary payer.

Applying Coordination of Benefits Across Insurance Types

The principles of Coordination of Benefits extend beyond health insurance, adapting to various insurance types where multiple policies might exist. In health insurance, common scenarios involve family coverage, such as a child covered under both parents’ plans or an individual covered by both their employer’s plan and a spouse’s plan. COB rules, including the birthday rule or employment status, determine the primary and secondary payers.

An individual might also have a primary health plan and a supplemental plan, like Medigap, which works with Medicare to cover deductibles, copayments, and coinsurance.

For auto insurance, COB principles apply to medical payments (MedPay) or personal injury protection (PIP) coverage. If an individual has health insurance and also MedPay coverage on their auto policy, their health insurance is primary for medical expenses resulting from an auto accident. The auto MedPay coverage would then act as secondary, covering out-of-pocket costs such as deductibles or copayments not covered by health insurance.

If multiple auto policies cover a single vehicle, such as a personal policy and a commercial policy, specific clauses dictate which policy responds first in the event of an accident.

Dental and vision insurance also follow COB guidelines when an individual holds multiple policies. For example, a child might be covered under both parents’ dental plans. The birthday rule often applies to determine the primary dental plan for dependents.

For vision care, if an individual has coverage through their employer and also through a spouse’s plan, one plan will be designated primary and the other secondary. The secondary vision plan would then cover any remaining eligible expenses after the primary plan has paid its benefits.

Managing Claims with Multiple Policies

When managing claims with multiple insurance policies, inform both insurers about other coverage. Disclosing all relevant policies helps prevent delays and ensures claims are processed correctly according to COB rules. Failing to inform an insurer of other coverage could lead to claim denials or complications.

The initial claim submission should be directed to the primary insurer. This involves completing necessary claim forms and providing supporting documentation, such as medical bills, police reports, or repair estimates. The primary insurer processes the claim according to its policy terms and COB rules, paying its share of covered expenses. Policyholders should retain copies of all submitted documents.

After the primary insurer processes the claim, they issue an Explanation of Benefits (EOB) statement. This document details covered charges, amounts paid by the primary insurer, and the portion remaining the policyholder’s responsibility. The EOB is a key document for the next step in the claims process, serving as proof of the primary insurer’s payment and the remaining balance.

To submit the claim to the secondary insurer, the policyholder provides a copy of the primary insurer’s EOB and a new claim form. The secondary insurer reviews the EOB and processes remaining eligible expenses, often covering deductibles, copayments, or other costs not fully paid by the primary plan.

Policyholder Responsibilities

Individuals with multiple insurance policies carry specific responsibilities. Inform each insurance company about all other existing coverage. This disclosure is often required by policy terms and helps insurers properly apply Coordination of Benefits rules. Providing complete information at enrollment and renewal helps avoid issues during claims processing.

Another responsibility involves reviewing and understanding the specific COB clauses within each policy document. These clauses outline how each insurer will coordinate benefits with other plans, including rules for determining primary versus secondary status. Policy documents are available from the insurer, often online or by mail.

Maintaining thorough records of all claims, communications, and policy documents is important. This includes copies of submitted claim forms, Explanation of Benefits statements from both primary and secondary insurers, and any correspondence related to coverage or claims. Organized records help track payments, resolve disputes, or understand the history of past claims.

Policyholders must promptly update their insurers about life events or changes in coverage. This includes changes in employment, marital status, or the addition or removal of dependents, which can impact primary and secondary designations. Timely updates ensure COB rules are applied correctly and coverage remains appropriate.